Amid e-commerce boom, anti-Amazon Shopify takes flight
The pandemic has forced businesses worldwide to pivot online to survive, and several have considered Shopify, a Canadian company that has emerged as a thriving alternative to Amazon.
Founded 15 years back in Ottawa, Shopify allows businesses to create an e-commerce site in only a few clicks. Already growing with more than one million e-stores towards the end of 2019, its user base has exploded.
"The retail world that could have existed in 2030 has really been pulled back into 2020," Shopify president Harley Finkelstein said within an interview with AFP. "It feels as though COVID has permanently accelerated the growth of online commerce."
Amid a lockdown of bricks and mortar stores, online commerce has boomed this season. Consumers have grown familiar with buying online, and industry giants, led by Amazon, have seen sales rocket.
Concurrently, many businesses that didn't have a presence or a primary online sales channel took the plunge as the pandemic took hold.
Popular with entrepreneurs, Shopify saw the number of new stores created on its platform jump 71 percent in the second quarter compared to the previous one.
Among these new e-merchants is Tariq Al Barwani, creator of Plantae, a tea bar in Toronto that remained open in March at the beginning of the lockdown.
But with only a small number of customers a day, the problem quickly became untenable, forcing him to walk out of business in May.
The same month, supported by a municipal program helping smaller businesses damaged by the crisis to go digital, he opened a store on Shopify.
"It took us weekly," he recalls from his living room, overlooking Lake Ontario, where he now works. "In the event that you are being used to going on the internet, it is easy to understand."
Shopify has turned into a resounding success far from Silicon Valley.
It had been co-founded in 2006 by Tobias Lutke, a German who'd moved to Canada for love and designed the program originally to market snowboards online.
Hailed because of its simplicity, it has seen the number of stores on its platform grow from 150,000 in 2014 to over one million -- in 175 countries -- in 2019, asserting itself in the eyes of several independent merchants instead of Amazon.
"For retail to thrive, it has to be in the hands of the many, not the few," Finkelstein said. "We need to have as many retailers, like many brands, as many entrepreneurs and smaller businesses selling, so that we don't all look the precise same, (and) so we don't buy the precise same stuff."
More bluntly, Lutke, now 40, said on Twitter this past year: "Amazon is wanting to build an empire. Shopify is trying to arm the rebels."
If they created their clothing line in 2015, the Toronto-based founders of Kotn, a brand that emphasizes traceability, went right to Shopify.
With Can$10,000 ($7,500) in startup funds, they couldn't afford to employ an agency.
And unlike Amazon's marketplace, Shopify allowed them to "tell (their) own story" and also to control their relationship with customers, Mackenzie Yeates, one of the co-founders, told AFP.
Shopify is also enjoying growing success with established brands seeking to sideline intermediaries who sell their wares and build direct relationships with customers.
Pepsi, Unilever and Mondelez have all opened storefronts on Shopify in recent years.
Ketchup maker Heinz and Lindt chocolates recently followed suit. Celebrities like Kylie Jenner and Victoria Beckham also utilize it to sell products to their fans.
As a result, the volume of sales handled by the platform increases quarter after quarter, and in America, Shopify merchants are actually the second-largest grouping of online merchants in the country, behind Amazon.
Investors have taken note too.
On the Toronto and NY stock exchanges, Shopify's share price has tripled since March. With a market capitalization of around Can$170 billion at mid-October, it has become Canada's most valuable company.
Toronto e-commerce expert Chris Silvestre says it's "an excellent company," but considers its stock overvalued, partly because it is still largely unknown how the e-commerce sector will evolve once the pandemic has peaked.
For Al Barwani, his web store sales have exceeded expectations but nonetheless remain well below his former tea bar.
While it was easy to launch his site, building clients will need time, he concedes. Most importantly, he will need to get used to his new virtual life.
"I really do miss my tea bar," he said. "It had been nice to see locals come across and saying 'hi,' asking how you're doing... (ask) what exactly are you up to the weekend, or how're your loved ones doing. Those sorts of interactions are actually hard to reproduce online."
Source: japantoday.com
